The Department of Housing and Urban Development is reviewing HSBC’s lending practices in certain majority Black and Hispanic neighborhoods, the bank disclosed. The regions under scrutiny include New York, Seattle and several parts of California, according to the nonprofit organization whose complaint prompted the investigation.

Volumes were driven down largely by slowing conventional purchase activity resulting from ongoing interest rate and affordability challenges, the Mortgage Bankers Association said.

Values are very likely to dip in the metros considered among the most desirable during the pandemic.

Hedging affected earnings available for distribution, although the company is now profitable again using standard accounting.

The Federal Reserve is leading the push for broader, more standardized risk-capital rules, yet some of its board members, other regulators and industry groups are uncomfortable with the proposal.

The mortgage company was able to move a lot closer to its goal to become a $1 trillion servicer with the expiration of the final tender offer and closing of the deal.

But the government-sponsored enterprise is still concerned about the fiscal health of its lender counterparties as volumes are down considerably from last year.

The deal is expected to help Stavvy further growth of digital self-service loss-mitigation options for borrowers and their lenders.

For all intents and purposes, the average 30yr fixed rate at the average lender is as high as it’s been since November 2022.  The number itself as far as we see it is 7.10 which means most lenders are quoting 7.125% after adjusting for discount points (or just “points” for short). For example, a borrower could opt to pay just over 1% of the loan balance upfront in order to drop the rate to 6.625%.  Some lenders are quoting 6.625% with that extra upfront cost.  Others are quoting 7.125% without the extra cost.   The upward momentum in rates didn’t draw on any specific news or developments today.  Rather, markets are bracing for impact from upcoming economic data as well as tomorrow’s announcement of the latest borrowing amounts from the US Treasury.   Treasury issuance matters because Treasuries are one of the most important determining factors for interest rates in the U.S. The more that are issued, the lower the price and the higher the yield/rate.  Analysts know the amounts will be going up and markets are nervous and uncertain about the amount of the increase.  Once that’s resolved, and if the week’s remaining economic data paints a cooler picture for the economy, rates could easily recover.  On the other hand, if the data is upbeat and if Treasury issuance rises more than expected, the upward momentum will continue. 

Overheard last night at a bar here in Austin, Texas: “It’s hotter than the hinges to the gates of hell.” Not so hot, as residential lenders know, are volume and mortgage rates (which some believe may drift down during the final five months of 2023). No one can predict interest rates with any degree of accuracy or confidence, so originators should optimize the current situation with the cards they have been dealt, which aren’t always good. Speaking of which, an owner of a non-bank lender who was doing $40 million a month a few years ago and who is now doing $10 million a month wrote, “Rob, are you hearing that, in the acquisition of a lender, that all the premium is gone, and that deals are comprised of just an earn out over 2-3 years?” Yes, I am hearing that, for lenders doing $10 million a month. But every deal is different, and for companies that were doing $80 million a month and are now doing $30 million, then there might still be a premium. You should check with someone like STRATMOR M&A partner Garth Graham for particulars. (Today’s podcast can be found here and is sponsored by Candor. Candor’s patented automated underwriting decision engine, CogniTech, is a state-of-the-art, 100 percent machine platform that can handle infinite loan scenarios. Listen to an interview with LoanCare’s Rodney Moss on how subservicers are winning business and what to expect in the servicing space for the remainder of 2023.) Lender and Broker Software, Products, and Services